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Shell Place posts losses after event-filled summer

Fans of the Edmonton Eskimos and Saskatchewan Roughriders wait to enter Shell Place for the Northern Kickoff match in Fort McMurray, Alberta on June 13, 2015. VINCENT MCDERMOTT/POSTMEDIA NEWS/TODAY STAFF

Packed with high profile and heavily promoted events, the inaugural summer for Shell Place ended with a projected year end deficit of $387,000, down from the Regional Recreation Corporation’s original prediction of $5.9 million, and without a board chairman.

The RRC whittled $3.7 million off the expected deficit by cutting operational spending and laying off eight staff members - six part-time custodial workers, one full-time building operator and one full-time handyman.

After seven years, Mike Cachia has resigned as chair of the board of directors. CEO Annette Antoniak says his resignation was not motivated by the deficit or layoffs.

Before the aggressive spending cuts, most of of the RRC’s losses came from the three high profile and heavily promoted events designed to celebrate Shell Place’s opening.

A loss of $2.9 million came from both Northern Kickoff games and the Aerosmith concert. A further $1.5 million loss came from “unrealized revenue” from budgeted events in July and September. Antoniak says ticket sales from the Western Canada Summer Games were not the responsibility of the RRC.

During the first five months of the year, the RRC posted a profit of $1.8 million, offseting some debt, resulting in an anticipated net loss of $4.1 million at year-end.

“There was the expectation with the opening of Shell Place in a robust economy that we would achieve those numbers and that didn’t happen,” said Antoniak.

Antoniak describes the 2016 budget she will pitch to council is “conservative,” but with enough room to book big name performances. Future concerts and most events will advance under a copromotional model.

“You will see a budget done on numbers we know we can achieve given the current economic situation,” she said.

The RRC plans to reevaluate programs and operational spending at the recreation centre in Anzac, and conduct feedback with local residents. There are also plans to reach out to camp workers at the various SAGD sites south of Fort McMurray; management of Nexen’s Long Lake already routinely use the facility for meetings.

To Councillor Tyran Ault, who attended the Wednesday morning meeting announcing the results with councillors Keith McGrath and Lance Bussieres, the losses are “unacceptable,” but not surprising.

“You just had to look at how many empty seats there were at the events to come to this conclusion,” he said. “We didn’t know the numbers until today, we learned about them at the same time as everybody else, but this wasn’t a surprise.”

Ault and McGrath both said council needs to reevaluate the need for the proposed recreation centres in Fort Chipewyan and Conklin. The councillors are also concerned if taxpayers will be on the hook for this summer's losses.

“The citizens of Fort McMurray are contributing an operational grant to the RRC, any shortfalls could end up in the operating grant the RRC requests from the municipality,” said McGrath, who is on the board of directors with Coun. Julia Cardinal. "We're in a downturn and the reality is we need a business plan that will reflect that downturn."